Ford Reroutes $7 Billion of Working Capital from Cars to Trucks
Ford’s long-term strategy also includes accelerating smart and electrified vehicles as well as drastically reducing material costs.
Say goodbye to cars as we know them. That’s basically the biggest takeaway from Ford CEO Jim Hackett‘s coming out party. The new leader of the Ford Motor Company recently addressed investors and the media for the first time since assuming the top office on May 22. Needless to say, the message was received loud and clear.
“Ford was built on the belief that freedom of movement drives human progress,” said Hackett. “It’s a belief that has always fueled our passion to create great cars and trucks. And today, it drives our commitment to become the world’s most trusted mobility company, designing smart vehicles for a smart world that help people move more safely, confidently, and freely.”
Hackett and his executive team didn’t waste any time before dropping the hammer on several hefty decisions. For starters, Ford will pull $7 billion originally designed for car production and reroute it to the truck and SUV budget. This includes the development of the Ranger and EcoSport in North America, as well as the all-new Bronco.
In addition, Ford will reduce internal combustion engine expenditures by one-third and redeploy that capital into electrification, on top of a previously announced $4.5 billion investment. This involves the development of the hybrid F-150, Mustang, Transit plug-in hybrid, an autonomous vehicle hybrid, and a fully-electric, small SUV.
Ford will reroute $7 billion to the truck/SUV budget. This includes the development of the Ranger and EcoSport in North America, as well as the all-new Bronco.
Lastly, Ford is also reducing engineering costs by $4 billion over the next five years by increasing the use of common parts across its full line of vehicles, and reducing order complexity. For example, the Explorer will go from offering 1,168 orderable configurations to “only” 672. The Escape, from 2,302 to 228.
The never ending changes to which the automotive industry has to adjust seem to get more and more complex with the birth of newer technologies and the ever-increasing threat of political and economic regulations.
We at Ford Truck Enthusiasts think this could be the death of the sedan and a huge turning point for the future of Ford trucks and SUVs. What do you think?
Chime in with your thoughts on the forum. >>